In Re George Worthington Co.

76 B.R. 605, 1987 Bankr. LEXIS 1323
CourtUnited States Bankruptcy Court, N.D. Ohio
DecidedAugust 14, 1987
Docket19-11233
StatusPublished
Cited by9 cases

This text of 76 B.R. 605 (In Re George Worthington Co.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re George Worthington Co., 76 B.R. 605, 1987 Bankr. LEXIS 1323 (Ohio 1987).

Opinion

MEMORANDUM OF OPINION AND ORDER

RANDOLPH BAXTER, Bankruptcy Judge.

The several matters before the Court comprise various applications for allowance of interim fees and expense reimbursements pursuant to 11 U.S.C. § 331. Upon hearing, with due notice having been made upon parties entitled thereto, the following constitutes the Court’s findings pursuant to Rule 7052, Bankruptcy Rules:

These applications constitute core proceedings pursuant to 28 U.S.C. § 157(b)(2)(A).

Application of Thompson, Hiñe and Flory

Applicant seeks an allowance of interim compensation in the amount of $212,107.25, in addition to expense reimbursements to-talling $7,930.54. The aforesaid amounts are requested for the application period of September 9, 1986 through February 28, 1987, and constitute an initial request for compensation and expense reimbursement. In reaching a determination of reasonable compensation, the Court has reviewed in detail the subject application with supporting documentation, in addition to the representations of counsel.

Factors considered in establishing reasonable compensation were inclusive of the time and labor required; the novelty and difficulty of issues encountered; the skill necessary to perform the services properly; the preclusion of other employment; the customary fee; time limitations imposed; the amounts involved and the results obtained; the applicant’s experience, reputation and ability; the nature and length of the professional relationship with the client; and awards in similar cases. See, Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974); In re Cle-Ware Indus., Inc., 493 F.2d 863 (6th Cir.1974); cert. denied, 419 U.S. 829, 95 S.Ct. 50, 42 L.Ed.2d 53 (1974); Murphy v. Intn’l. Union of Operating Engineers, 774 F.2d 114 (6th Cir.1985); cert. denied., 475 U.S. 1017, 106 S.Ct. 1201, 89 L.Ed.2d 315 (1986). In view of these several factors, principal attention is given to the quantity, quality and results achieved. .

Herein, a total of 1,843.25 hours were reportedly expended for professional services rendered at an average hourly rate of $115.07 per hour.

Upon examination of the professional services rendered, it is noted that the Debtor’s petition for relief under Chapter 11 was filed on September 24, 1986; however, the Applicant’s professional services are invoiced as of September 9, 1986. Professional services provided to a debtor prepetition are not compensable pursuant to 11 U.S.C. § 330 or 11 U.S.C. § 331. Such prepetition services are general unsecured debts and are to be treated accordingly. Specifically, 216 hours of prepetition professional services were charged. Even where it is permissible under § 1107(b) for an attorney to represent a debtor prepetition and such representation continues postpetition, accrued prepetition billings are not compensable within the context of § 331 of the Code [11 U.S.C. § 331]. The Applicant was appointed to serve as debt- or’s counsel on September 24, 1986. Accordingly, compensation sought for the 216 hours rendered prepetition is disallowed.

Compensable professional services under § 331 are adjudged by the same standards set forth under § 330 of the Code. Under § 330, reasonable compensation is allowable for actual and necessary services rendered which are beneficial to *608 the debtor’s estate. Although the services rendered by the Applicant were substantial during the subject application period, the charges, generally, were excessive. Examination of the Applicant’s supporting documentation reveals an inordinate amount of unsubstantiated inter-office conferencing, and in some instances, there was dual invoicing for inter-office conferencing. Inter-office conferencing is not compensable without an explicit explanation for the necessity of such conferencing. In re Nashville Union Stockyard Restaurant, 54 B.R. 391, 396 (Bankr.M.D.Tenn.1985). Further, the Applicant’s deployment and charge for fifty-seven (57) professionals and paraprofessionals to the debtor’s estate is particularly excessive. This practice is especially questionable in view of the fact that the Applicant represented the Debtor for more than fifty years prepetition. 1 Moreover, the Applicant represented at the hearing that a significant portion of the subject billing was unrelated to the debtor’s bankruptcy proceeding. 2

Rule 2016 of the Bankruptcy Rules requires an applicant seeking interim or final compensation for services from the estate to provide a detailed statement of the services rendered, time expended and expenses incurred, and the amounts requested. To a significant degree, much of the Applicant’s services were lumped together with an attendant charge for the lumped services. Such lumping creates difficulty for the Court to discern what charges were made for specific services rendered. The burden is on the applicant to clearly and explicitly set forth and support its application. In re Cumberland Bolt & Screw, Inc., 44 B.R. 915, 917 (Bankr.M.D.Tenn.1984). Multiple services lumped together under a single time/charge entry are of minimal assistance to the Court in determining reasonable compensation. In re Art Shirt Ltd., Inc., 30 B.R. 318 (Bankr.E.D.Pa.1983); In re Hamilton Hardware, 11 B.R. 326 (Bankr.E.D.Mich.1981).

Accordingly, an allowance of $149,-422.87, applied against the $100,000.00 retainer, is hereby awarded as interim compensation for the subject application period, with twenty (20%) percent of such award withheld pending an award of final compensation.

Generally, the Applicant’s itemized expenses for which it seeks reimbursement are reasonable and are set forth in adequate detail, however, the statutory filing fee for a bankruptcy petition is a nonreim-bursable expense to the debtor’s estate. Where the applicant advanced funds to its client prepetition for the purpose of defraying the filing fee, such is deemed to be a general unsecured claim. Accordingly, the subject $200.00 filing fee herein is nonreim-bursable and an award of $7,730.54 is made for reimbursement of expenses reasonably incurred for the benefit of the Debtor’s estate during the application period.

Application of Dennis M. O’Dea and Keck, Mahin & Cate (KM & C):

KM & C, duly appointed counsel for the Official Creditors’ Committee, seeks an allowance of interim compensation for professional services rendered pursuant to § 331 of the Code for the application period of October 9, 1986- through April 27, 1987.

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Cite This Page — Counsel Stack

Bluebook (online)
76 B.R. 605, 1987 Bankr. LEXIS 1323, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-george-worthington-co-ohnb-1987.